STATE BOARD OF EQUALIZATION

STATE OF CALIFORNIA
STATE BOARD OF EQUALIZATION
CAROLE MIGDEN
First District, San Francisco
450 N STREET, SACRAMENTO, CALIFORNIA
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0082
TELEPHONE (916) 445-5580
FAX (916) 323-3387
BILL LEONARD
Second District, Ontario
CLAUDE PARRISH
Third District, Long Beach
www.boe.ca.gov
August 3, 2004
JOHN CHIANG
Fourth District, Los Angeles
STEVE WESTLY
State Controller, Sacramento
Honorable Stephen L Vagnini,
Monterey County Assessor
P.O. Box 570 Courthouse
Salinas, CA 93902
Attn:
Re:
RAMON J. HIRSIG
Executive Director
, Assistant Assessor – Valuation
Revenue and Taxation Code section 439.2 – Enforceably
Restricted Historical Property
Dear Mr. Vagnini:
This is in reply to your letter of June 9, 2004 addressed to Acting Chief Counsel Jean
Ogrod in which you request a legal opinion concerning the proper valuation of a newly
constructed garage/storage building on a parcel consisting of land and an existing structure. The
owner of the parcel has entered into a restricted historical property contract pursuant to Revenue
and Taxation Code section 439.1 with the City of Monterey. In your view, the new
garage/storage building is not an historical property within the meaning of section 439 and,
therefore, the completed new construction may not be valued as enforceably restricted historical
property pursuant to section 439.2. For the reasons set forth below, we agree that the new
garage/storage building does not qualify as enforceably restricted historical property subject to
valuation under section 439.2.
Factual Background
The subject parcel is a qualified historical property as defined in Government Code
section 50280.1. The owner of the parcel entered into a contract dated October 18, 2001 with the
City of Monterey (“contract”) to restrict the property as a qualified historical property. The
contract recites that it was entered into pursuant Government Code section 50280 which
authorizes cities to contract with owners of qualified historical properties in order to provide for
the “appropriate use, maintenance and restoration” of such properties. The stated purpose of the
contract is “to protect and preserve the characteristics of historical significance of the Historic
Property.” The “Historic Property” is identified as “real property, together with associated
structures and improvements thereon . . .” of the subject parcel. Under the contract, the owner
covenants “to preserve and maintain the characteristics of historical significance of the Historic
Property” and “, where necessary, [to] restore and rehabilitate the Historic Property to conform
to the rules and regulations of the Office of Historic Preservation of the State Department of
Parks and Recreation, U.S. Secretary of the Interior’s Standards for Rehabilitation, State
Historical Building Code, and City of Monterey, all as amended.”
Honorable Stephen L Vagnini
2004
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August 3,
Subsequently, the owner constructed a garage/storage building (“garage”) on the parcel
which was completed in December 2003. The Assessor believes that the new construction is not
considered “Historic Property” subject to the contract. Therefore, the Assessor made a
supplemental assessment for the current fair market value of the newly constructed garage as of
the date of completion and established a base year value.
Law and Analysis
Article XIII, section 8 of the California Constitution provides, in relevant part, that
To promote the preservation of property of historical significance, the Legislature
may define such property and shall provide that when it is enforceably restricted,
in a manner specified by the Legislature, it shall be valued for property tax
purposes only on a basis that is consistent with its restrictions and uses.
The Legislature implemented article XIII, section 8 by adopting Government Code section
50280 and following sections which authorize local governments to contract with owners of
historical properties to place use restrictions on such properties, in part, to carry out the purposes
of the Revenue and Taxation Code section 439 and following sections which govern the
assessment of restricted historical property. Section 439.1 specifies that “restricted historical
property” means
qualified historical property, as defined in Section 50280.1 of the Government
Code, that is subject to a historical property contract executed pursuant to Article
12 (commencing with Section 50280) of Chapter 1 of Part 1 of Division 1 of Title
5 of the Government Code. For purposes of this section, “qualified historical
property” includes qualified historical improvements and any land on which the
qualified historical improvements are situated, as specified in the historical
property contract. If the historical property contract does not specify the land that
is to be included, "qualified historical property" includes only that area of
reasonable size that is used as a site for the historical improvements.
Thus, an historical property is considered to be enforceably restricted only if it satisfies two
conditions: It must be a qualified historical property as defined in Government Code section
50280.1, and it must be subject to an historical property contract.
Government Code section 50280.1 defines a “qualified historical property” as
privately owned property which is not exempt from property taxation and which meets either of
the following:
(a) Listed in the National Register of Historic Places or located in a registered
historic district, as defined in Section 1.191-2(b) of Title 26 of the Code of
Federal Regulations.
(b) Listed in any state, city, county, or city and county official register of
historical or architecturally significant sites, places, or landmarks.
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Honorable Stephen L Vagnini
2004
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August 3,
In this case, the contract recites that “the property is identified as a historic resource on
the City of Monterey Zoning Map” and, thus, subdivision (b) is met.
Under Chapter 38, Article 15 of the City of Monterey City Code, section 38-73, “historic
resource” is defined as “a building, structure, object, site or district as defined in National
Register Bulletin 15.” According to the definitions set forth in the National Register Bulletin 15,
the subject property, in its status as a “historic resource”, is properly categorized as a “building”.
Section IV of the National Register Bulletin 15 defines a “building” as follows:
A building, such as a house, barn, church, hotel or similar construction, is created
principally to shelter any form of human activity. “Building” may also be used to
refer to a historically and functionally related unit, such as a courthouse and jail
or house and barn.
Section IV further specifies that “[b]uildings eligible for the National Register must include all
of their basic structural elements. Parts of buildings, such as interiors, facades, or wings, are not
eligible independent of the rest of the existing building. The whole building must be considered,
and its significant features must be identified.”
We infer from the National Register definition of “building” that a newly constructed
building, such as the garage, is not a historic resource as defined by section 38-76 and, thus, is
not a qualified historical property within the meaning of Government Code section 50280.1.
Eligibility for the National Register is determined by the extent to which the basic structural
elements of an existing building are intact. We conclude from this criterion that a newly
constructed building would not be eligible because it is not an existing building with basic
structural elements.
Moreover, the National Register Criteria for Evaluation set forth in National Register
Bulletin 15 supports our conclusion that a newly constructed building, such as the garage, is not
eligible for the National Register. In applying the Criteria for Evaluation, a building would be
judged based, in relevant part, on the quality of its significance in American history or
architecture and its association with significant historical events or significant historical persons,
or the extent to which it embodies distinctive characteristics of specific types or yields or is
likely to yield information important about history. In the explanation of the criteria
considerations, the Bulletin lists only one type of newly constructed property that may be
eligible. In this regard, a “reconstructed historic building” is eligible for the National Register if
“accurately executed in a suitable environment and presented in a dignified manner as part of a
restoration master plan, and when no other building or structure with the same association has
survived circumstances.” In our view, the garage clearly is not eligible because it has no
significance in American history or architecture nor does it meet any of the other criteria. Thus,
the garage is not a reconstructed historic building but, rather, is a newly constructed building
with no historical significance.
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Honorable Stephen L Vagnini
2004
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August 3,
Additionally, correspondence from a historical property expert to the city planning office
submitted with your request letter suggests that the “historic resource” includes the Finch House
and the land, but not the garage. In that letter, dated February 18, 2002, from Kent L. Seavey, a
historian who reviewed the project plan, to Ms. Kim Cole, Associate Planner, Planning and
Community Development Department of the City of Monterey, Mr. Seavey makes a finding that
the plans for the garage are in keeping with the relevant Secretary of the Interior’s Standards for
the Treatment of Historic Properties. The City of Monterey Code section 38-76, subpart
G.2.a.(3) requires such a finding as a condition of issuing a historic permit for alteration of the
property. In the analysis, Mr. Seavey distinguishes the “historic building” and “historic
property” from the new construction which he describes as the “proposed garage and its access
drive.” He also concludes that removal of the garage in the future would not impair “the
essential form and integrity of the historic property.” We infer from the separate references to
historic building and historical property and the garage a purposeful distinction denoting that the
existing house and land are the historic resource while the newly constructed improvement is
not.
In view of our finding that the garage is not a historic resource as defined by the City of
Monterey Code section 38-73, we conclude that the garage is not a Historical Property subject to
the contract and, thus, is not a qualified historical property under Government Code section
50280.1. Therefore, the garage is not a restricted historical property subject to the valuation
provisions of Revenue and Taxation Code section 439.1.
The views expressed in this letter are only advisory in nature; they represent the analysis
of the legal staff of the Board based on present law and the facts set forth herein, and are not
binding on any person or public entity.
Very truly yours,
/s/ Lou Ambrose
Lou Ambrose
Supervising Tax Counsel
LAA:eb
Prec/Restrict/04/02-LA.doc
cc: Mr. David Gau, MIC:63
Mr. Dean Kinnee, MIC:64
Ms. Mickie Stuckey, MIC:62
Mr. Todd Gilman, MIC:70
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